CHRISTINE FORSTER | Platts

THE NEW GOVERNMENT of Papua New Guinea plans to "give priority support to ensure the delivery" of InterOil Corporation's Gulf LNG project during its current term, Governor General Sir Michael Ogio said when opening parliament yesterday.

"In this regard the government will immediately establish a state negotiating team comprising of key agencies to negotiate a gas agreement with InterOil and its partners," Sir Michael said.

"The team will work with Petromin, the state nominee to ensure that the best gas agreement is negotiated. Specific consideration will be given to increased benefits for landowners, local level governments and provincial governments."

The new government will also ensure that the ExxonMobil-led LNG project is "delivered on time so that revenue flows will begin 2014," he said.

"These two projects will underpin our economy for the next 40 years."

Minister for Petroleum and Energy William Duma late last week agreed to suspend a notice of intent to terminate InterOil's December 2009 agreement for the development of its LNG project.

The notice had been issued by Duma in May on the grounds that the project did not meet the requirements under the agreement that it be based on recognized technology and operated by a major company.

Duma said that, since then, InterOil has held a number of constructive meetings with government departments, which are now scheduled to brief the prime minister and cabinet on the progress made.

InterOil meanwhile is currently negotiating to bring a heavyweight partner into the project.